LEE LAI CHING v. TSANG FAT

IN THE COURT OF APPEAL

1987, No. 38
(Civil)

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JUDGMENT

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Cons, V.-P. delivered the judgment of the Court:

1. This is a motion in proceedings which action for possession in the District Court. The Writ alleged that the Defendant was a trespasser on property belonging to the Plaintiff. The property was acquired in December 1985 from one Liu Yau Fat, represented in the transaction by an attorney Sze To Kiu.

2. No defence was filed to the claim and judgment was duly entered in default. Thereafter the Defendant applied to have the judgment set aside. The application, and a further application to review, was spread over several hearings with which we need not concern ourselves.

3. The Defendant's case is apparent from the judgment ultimately given by the learned District Judge. It is that, prior to the assignment to the Plaintiff, the Defendant had worked on the property, as well as on other properties, at the request of Sze To Kiu, and provided services and materials to the extent of $219,000. (It would not be unreasonable to assume that in this respect Sze To Kiu was also acting for the previous owner.)

4. It is further suggested that at some stage, as the result of an agreement between the Plaintiff's husband, the Defendant and Sze To Riu, the Plaintiff's husband paid $10,000 to the Defendant and promised to pay a further $200,000 in return for the assignment to his wife of the property. The suggestion was supported by the evidence of Sze To Kiu, although the evidence of the Plaintiff's husband appears to have limited the agreement to the payment of $10,000 only.

5. The judge concluded that the sum of $219,000 was a simple debt owed by Sze To Kiu to the Defendant and had nothing to do with the previous owner. He therefore refused to set aside the default judgment.

6. The Defendant comes to this Court by way of appeal, pursuant to leave granted by a single judge of this Court. The Plaintiff very fairly now concedes that the Defendant has an arguable defence based on equitable rights against the previous owner of which the Plaintiff had due notice and through Her counsel advises that she is content that. we should allow the appeal. We have to observe, nevertheless, that, the Defendant being in person below, a defence on these lines was not suggested to the judge. In those circumstances we think it is proper to allow the appeal, to set aside the judgment below, and to remit the matter to the District Court. In anticipation of such an order the parties have agreed further terms, which we are pleased to embody in our order, namely that the Defendant do file a defence and counterclaim, if any, within 21 days from today's date and that there be no order as to costs in the appeal or in the court below, the Plaintiff agreeing to waive all costs under all previous orders granted in her favour, except those expended in the preparation of the Particulars of Claim and the service thereof, which shall be costs in the cause of the District Court action.